AMSC a global energy solutions provider serving the wind and power grid industry, announced that it has entered a settlement agreement with Sinovel Wind Group Co. Ltd. to resolve all existing commercial disputes between the parties.
Under the terms of the settlement agreement, Sinovel has agreed to pay AMSC an aggregate cash amount in Renminbi (RMB) equivalent to $57.5 million.
Under the terms of the settlement agreement, Sinovel has agreed to pay AMSC an aggregate cash amount in Renminbi (RMB) equivalent to $57.5 million, consisting of two installments. Sinovel has agreed to pay AMSC the first installment of $32.5 million by July 5, 2018, and has agreed to pay AMSC the second installment of $25 million (Second Payment) within 10 months after the U.S. District Court delivers the first sentence against Sinovel (it is expected to occur on July 6, 2018 (Second Payment Due Date).
Wenyuan Wei, former Sinovel chairman, and a current Sinovel shareholder, has delivered a letter of guarantee to AMSC for the Second Payment should Sinovel fail to make such payment by the Second Payment Due Date.
“We valued the past cooperation between Sinovel and AMSC which was heralded as the example of Sino-US cooperation in the new energy area,” said Daniel P. McGahn, President, and CEO of AMSC. “Through Sinovel’s and AMSC’s joint efforts, we have signed a settlement agreement to resolve the previous disputes in a constructive manner that we believe will enable us to move on with our respective businesses. This closes a challenging chapter for AMSC.”
McGahn continued: “We thank the Chinese, American, Austrian, and EU governments for their attention, understanding, and support.”
In addition, pursuant to the terms of the settlement agreement, AMSC and its wholly-owned Austrian subsidiary, AMSC Austria, have granted Sinovel a non-exclusive license for certain AMSC intellectual property to be used solely in Sinovel’s doubly fed wind turbines. In the event that Sinovel or Wei does not make the Second Payment by the Second Payment Due Date, the agreement provides that the non-exclusive license will terminate.
AMSC and Sinovel have also agreed to submit withdrawal applications to terminate the various legal proceedings between them, with the right to re-file, to the relevant Chinese courts and the Beijing Arbitration Commission. In addition, AMSC and Sinovel have agreed to a mutual release covering all subject matters of the commercial disputes, effective upon the completion of the Second Payment.
Filed Under: Financing, News
